December 08, 2003, 9:15 AM — The worldwide market for cell phones is outstripping even the most enthusiastic predictions from the beginning of the year, as consumers continue to snap up handsets at a dizzying rate, according to research released Monday by Gartner Inc.
Handset vendors sold 132.8 million units in the third quarter of this year, up 22 percent from last year's third-quarter shipments of 108.8 million units, said Ben Wood, an analyst with Gartner based in London. Gartner calculated the figures using the number of units sold to end users, rather than units shipped into the channel.
"The total market is on fire," he said. "We had predicted about 470 million units for the year, but it's going to be about 500 million this year," he said.
Mature cell phone markets such as western Europe and the U.S. are going through a replacement cycle, as consumers with older black-and-white phones are trading them in for new models with color screens and cameras, Wood said. "We're getting to a point where a mobile phone is as much about fashion as anything," he said.
Emerging markets, such as China and India, are also growing faster than expected with millions of new subscribers purchasing their first cell phones, Wood said.
Nokia Corp. lost a bit of market share in the quarter, but still commands the worldwide market with sales of 45.4 million units in the third quarter, good for 34.2 percent market share. Unit sales increased from the 38.6 million units sold in the third quarter of last year, but not as fast as the overall market.
Motorola Inc. sold 19.5 million units in the third quarter to rank in second place worldwide with 14.7 percent market share. The company also sold more units as compared to last year, but lost a percentage point of market share.
Samsung Electronics Co. Ltd. picked up market share at the expense of Nokia and Motorola, selling 14.8 million units in the quarter and increasing its market share from 10.5 percent in last year's third quarter to 11.2 percent in this year's third quarter. Fourth-place vendor Siemens AG also picked up market share with its sales of 12.1 million units in the quarter, up from last year's third-quarter market share of 7.4 percent to this year's third-quarter market share of 9.1 percent.
For some companies, demand is outpacing their ability to keep their customers supplied. Motorola announced this week that it is working with additional suppliers to find components for its newest camera phones, which have been in short supply due to sourcing problems.